Competitive Environment in the Banking Sectorin the Republic of Moldova: Characteristics and Perspectives

The banking system in the Republic of Moldova the same as in other states have a great importance for a sustainable development for the whole economy. The existence of a normal competitive environment in the banking sector would provide the national economy with necessary cheap financial resources and the creation of banking system will be able to cope with competitive pressures from outside the country. Recent publications which set out the banking sector in the Republic of Moldova have highlighted several shortcomings in the competitive environment of this area, in this context, we propose an analysis of the competitive environment of the banking sector in the Republic of Moldova, identifying signs of limiting competition and directions for improvement of competitive aspects of the banking sector in the Republic of Moldova, also taking into account the experience of other countries. From the point of view of competition, cooperation between enterprises, including financial institutions access to the strategic information of the competitor can affect its behavior, thus eliminating the benefits of competition. Analyzing the experience of other EU we suggest some recommendations: to stimulate competition in the banking sector and to discourage anti-competitive practices in this area. Competition in the banking sector may influence the stability of this sector, and consequently the whole economy. Thus, the importance of this domain for the whole economy, it’s of complex nature, it is necessary to identify a balance between macroeconomic component and the application of competition rules.